EX-99.2 3 exhibit99_2.htm SUPPLEMENTAL INFORMATION
Exhibit 99.2
 
Brookdale Senior Living Inc.
Corporate Overview - selected financial information
As of June 30, 2016
 
Corporate Overview
              
Investor Relations
Brookdale Senior Living Inc. ("Brookdale") is the leading operator of senior living communities throughout the United States.  The Company is committed to providing senior living solutions primarily within properties that are designed, purpose-built and operated to provide the highest quality service, care and living accommodations for residents.  As of June 30, 2016, the Company operates independent living, assisted living and dementia-care communities and continuing care retirement centers ("CCRCs"), with 1,114 communities in 47 states and the ability to serve approximately 107,000 residents. Through its ancillary services program, the Company also offers a range of outpatient therapy, home health, personalized living and hospice services.
  		     Ross Roadman 
SVP, Investor Relations
Brookdale Senior Living Inc.
111 Westwood Place, Suite 400
Brentwood, TN 37027
Phone (615) 564-8104
rroadman@brookdale.com
 
Community Information
Ownership Type
  
Period End
Number of
Communities
    
Period End
Number of Units
    
Percentage of
Q2 2016
Resident and
Management Fees
    
Percentage of
Q2 2016
Operating
Income
    
Percentage of
YTD 2016
Resident and
Management Fees
    
Percentage of
YTD 2016
Operating
Income
  
Owned
    
407
      
35,690
      
37.9
%
    
36.6
%
    
38.3
%
    
37.3
%
Leased
    
549
      
44,978
      
48.9
%
    
53.6
%
    
48.7
%
    
53.5
%
Brookdale Ancillary Services
    
N/A
      
N/A
      
11.5
%
    
5.0
%
    
11.4
%
    
4.5
%
Managed
    
158
      
26,647
      
1.7
%
    
4.8
%
    
1.6
%
    
4.7
%
    Total
    
1,114
      
107,315
      
100.0
%
    
100.0
%
    
100.0
%
    
100.0
%
                                                 
Operating Type - By Segment
                                                
Retirement Centers
    
95
      
17,142
      
15.9
%
    
19.7
%
    
15.8
%
    
20.1
%
Assisted Living
    
818
      
53,463
      
57.1
%
    
61.7
%
    
57.2
%
    
61.4
%
CCRCs - Rental
    
43
      
10,063
      
13.8
%
    
8.8
%
    
14.0
%
    
9.3
%
Brookdale Ancillary Services
    
N/A
      
N/A
      
11.5
%
    
5.0
%
    
11.4
%
    
4.5
%
Management Services
    
158
      
26,647
      
1.7
%
    
4.8
%
    
1.6
%
    
4.7
%
    Total
    
1,114
      
107,315
      
100.0
%
    
100.0
%
    
100.0
%
    
100.0
%
 
CFFO and Adjusted CFFO (See Note Regarding Non-GAAP Financial Measures)
 
($ in 000s)
  
FY 2015
    
FY 2016
  
     
Q1
      
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
    
Year to Date
  
                                                             
Net cash provided by operating activities
  
$
10,057
    
$
100,767
    
$
91,361
    
$
90,181
    
$
292,366
    
$
70,343
    
$
107,496
    
$
177,839
  
                                                                 
CFFO
  
$
88,103
    
$
80,922
    
$
66,250
    
$
81,783
    
$
317,058
    
$
86,154
    
$
106,064
    
$
192,218
  
Add: Integration, transaction, transaction-related and strategic project costs (1)
    
27,300
      
29,027
      
42,499
      
24,853
      
123,679
      
20,928
      
17,324
    
$
38,252
  
Adjusted CFFO
  
$
115,403
    
$
109,949
    
$
108,749
    
$
106,636
    
$
440,737
    
$
107,082
    
$
123,388
    
$
230,470
  
 
(1) The calculation of Cash From Facility Operations ("CFFO") includes integration, transaction, transaction-related and strategic project costs of $38.3 million and $56.3 million for the six months ended June 30, 2016 and June 30, 2015, respectively. For the six months ended June 30, 2016, integration costs include $11.3 million of transition costs associated with the Emeritus merger and organizational restructuring (such as severance and retention payments and recruiting expenses), $2.3 million of third party consulting expenses directly related to the integration of Emeritus (in areas such as technology and systems work), and $2.7 million of internal costs such as training, travel and labor, reflecting time spent by Company personnel on integration activities and projects. Transaction and transaction-related costs of $2.4 million for the six months ended June 30, 2016 include third party costs directly related to acquisition and disposition activity, community financing and leasing activity and corporate capital structure assessment activities, and are primarily comprised of legal, finance, consulting, professional fees and other third party costs. Strategic project costs of $19.6 million for the six months ended June 30, 2016 include costs associated with certain strategic projects related to refining the Company's strategy, building out enterprise-wide capabilities for the post-merger platform (including the EMR roll-out project) and reducing costs and achieving synergies by capitalizing on scale.
 
Stock Information
 
Common Stock Listing
  
FY 2015
    
FY 2016
  
NYSE: BKD
    
Q1
      
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
    
Year to Date
  
                                                             
Weighted average shares used in computing basic and diluted net income (loss) per share (000's)
    
183,678
      
184,266
      
184,570
      
184,805
      
184,333
      
185,153
      
185,825
      
185,489
  
 
Note Regarding Non-GAAP Financial Measures. This supplemental presentation contains financial measures utilized by management to evaluate our operating performance and liquidity that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP").  Each of these measures, Adjusted EBITDA, CFFO and Adjusted CFFO, should not be considered in isolation from or as superior to or as a substitute for net income (loss), income (loss) from operations, net cash provided by (used in) operating activities, or other financial measures determined in accordance with GAAP.  This supplemental presentation should be read in conjunction with the Company's earnings release dated August 8, 2016 and the consolidated financial statements included therein.  The Company strongly urges you to review the information under "Reconciliation of Non-GAAP Financial Measures" in such earnings release for the Company's definitions of each of these non-GAAP financial measures and a reconciliation of Adjusted EBITDA from net income (loss) and a reconciliation of CFFO and Adjusted CFFO from net cash provided by (used in) operating activities.  The Company cautions investors that amounts presented in accordance with the Company's definitions of such financial measures may not be comparable to similar measures disclosed by other companies, because not all companies calculate these non-GAAP financial measures in the same manner.
As noted in the earnings release dated August 8, 2016, the Company's definitions and calculations of Adjusted EBITDA and CFFO have changed from prior periods.  Prior period amounts of Adjusted EBITDA included in this supplemental presentation have been recast to conform to the new definition.  See Page 11 of this supplemental presentation for a description of the changes to the definition of Adjusted EBITDA, as well as a reconciliation of the amounts of Adjusted EBITDA previously reported for the full year 2015 and each of the quarters therein and the first quarter of 2016 using the prior definition to the amounts of Adjusted EBITDA calculated using the new definition.  In addition, the Company is now reporting CFFO and Adjusted CFFO as measures of liquidity, and as such the definitions of CFFO and Adjusted CFFO  have been revised to reflect the reconciliation of such measures from net cash provided by (used in) operating activities, and the Company is no longer presenting CFFO per share or Adjusted CFFO per share.  However, the amounts included in the calculation of CFFO and Adjusted CFFO have not changed, and the changes in the definition of CFFO and Adjusted CFFO have no effect on the amounts of CFFO or Adjusted CFFO presented in this supplemental presentation for this period or prior periods.
Page 1
Brookdale Senior Living Inc.
                
Segment Financial Data
                
As of June 30, 2016
                
 
Financial Data and Operating Information
              
($ in 000s, except Senior Housing average monthly revenue per unit)
          
 
Retirement Centers
  
FY 2015
    
FY 2016
  
     
Q1 (1)
    
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue
  
$
163,486
    
$
164,409
    
$
164,415
    
$
165,630
    
$
657,940
    
$
169,426
    
$
169,990
  
Expenses
    
92,962
      
92,365
      
94,081
      
93,275
      
372,683
      
94,977
      
95,236
  
Segment Operating Income
  
$
70,524
    
$
72,044
    
$
70,334
    
$
72,355
    
$
285,257
    
$
74,449
    
$
74,754
  
Segment Operating Margin
    
43.1
%
    
43.8
%
    
42.8
%
    
43.7
%
    
43.4
%
    
43.9
%
    
44.0
%
                                                         
Number of communities (period end)
    
99
      
98
      
98
      
95
      
95
      
95
      
95
  
Total average units(2)
    
17,369
      
17,279
      
17,289
      
17,293
      
17,308
      
17,096
      
17,095
  
Weighted average unit occupancy
    
88.8
%
    
88.4
%
    
88.7
%
    
89.1
%
    
88.8
%
    
88.9
%
    
88.9
%
Senior Housing average monthly revenue per unit(3)
  
$
3,533
    
$
3,589
    
$
3,573
    
$
3,584
    
$
3,570
    
$
3,715
    
$
3,727
  
                                                         
Assisted Living
  
FY 2015
        FY 2016  
     
Q1 (1)
    
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue
  
$
617,344
    
$
611,838
    
$
608,393
    
$
607,882
    
$
2,445,457
    
$
617,270
    
$
613,017
  
Expenses
    
393,838
      
388,479
      
397,180
      
388,657
      
1,568,154
      
396,460
      
378,932
  
Segment Operating Income
  
$
223,506
    
$
223,359
    
$
211,213
    
$
219,225
    
$
877,303
    
$
220,810
    
$
234,085
  
Segment Operating Margin
    
36.2
%
    
36.5
%
    
34.7
%
    
36.1
%
    
35.9
%
    
35.8
%
    
38.2
%
                                                         
Number of communities (period end)
    
837
      
833
      
832
      
820
      
820
      
820
      
818
  
Total average units(2)
    
55,073
      
54,700
      
54,592
      
54,492
      
54,714
      
53,510
      
53,521
  
Weighted average unit occupancy
    
87.2
%
    
86.4
%
    
86.5
%
    
86.6
%
    
86.7
%
    
85.6
%
    
85.3
%
Senior Housing average monthly revenue per unit(3)
  
$
4,283
    
$
4,316
    
$
4,292
    
$
4,296
    
$
4,297
    
$
4,493
    
$
4,478
  
                                                         
CCRCs - Rental
  
FY 2015
    
FY 2016
  
     
Q1 (1)
    
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue
  
$
155,991
    
$
151,561
    
$
149,572
    
$
147,448
    
$
604,572
    
$
152,260
    
$
148,225
  
Expenses
    
117,420
      
115,701
      
108,177
      
112,779
      
454,077
      
116,791
      
114,631
  
Segment Operating Income
  
$
38,571
    
$
35,860
    
$
41,395
    
$
34,669
    
$
150,495
    
$
35,469
    
$
33,594
  
Segment Operating Margin
    
24.7
%
    
23.7
%
    
27.7
%
    
23.5
%
    
24.9
%
    
23.3
%
    
22.7
%
                                                         
Number of communities (period end)
    
45
      
46
      
45
      
44
      
44
      
44
      
43
  
Total average units(2)
    
10,480
      
10,543
      
10,515
      
10,405
      
10,486
      
10,335
      
10,084
  
Weighted average unit occupancy
    
86.0
%
    
83.6
%
    
83.9
%
    
83.9
%
    
84.4
%
    
84.3
%
    
83.7
%
Senior Housing average monthly revenue per unit(3)
  
$
5,744
    
$
5,697
    
$
5,626
    
$
5,601
    
$
5,668
    
$
5,790
    
$
5,812
  
 
Total Senior Housing
  
FY 2015
    
FY 2016
  
     
Q1 (1)
    
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue
  
$
936,821
    
$
927,808
    
$
922,380
    
$
920,960
    
$
3,707,969
    
$
938,956
    
$
931,232
  
Expenses
    
604,220
      
596,545
      
599,438
      
594,711
      
2,394,914
      
608,228
      
588,799
  
Operating Income
  
$
332,601
    
$
331,263
    
$
322,942
    
$
326,249
    
$
1,313,055
    
$
330,728
    
$
342,433
  
Operating Margin
    
35.5
%
    
35.7
%
    
35.0
%
    
35.4
%
    
35.4
%
    
35.2
%
    
36.8
%
G&A Allocation(4)
  
$
42,093
    
$
37,399
    
$
36,968
    
$
42,881
    
$
159,341
    
$
44,524
    
$
45,806
  
Operating Income (Including G&A Allocation)
  
$
290,508
    
$
293,864
    
$
285,974
    
$
283,368
    
$
1,153,714
    
$
286,204
    
$
296,627
  
Operating Margin (Including G&A Allocation)
    
31.0
%
    
31.7
%
    
31.0
%
    
30.8
%
    
31.1
%
    
30.5
%
    
31.9
%
 
Number of communities (period end)
    
981
      
977
      
975
      
959
      
959
      
959
      
956
  
Total average units(2)
    
82,922
      
82,522
      
82,396
      
82,190
      
82,508
      
80,941
      
80,700
  
Weighted average unit occupancy
    
87.4
%
    
86.5
%
    
86.7
%
    
86.8
%
    
86.8
%
    
86.1
%
    
85.8
%
Senior Housing average monthly revenue per unit(3)
  
$
4,305
    
$
4,331
    
$
4,303
    
$
4,302
    
$
4,310
    
$
4,485
    
$
4,476
  
 
Page 2
 
Brookdale Senior Living Inc.
                
Segment Financial Data
                
As of June 30, 2016
                
 
Financial Data and Operating Information (continued)
            
($ in 000s, except Senior Housing average monthly revenue per unit)
          
 
Brookdale Ancillary Services
  
FY 2015
    
FY 2016
  
     
Q1 (1)
    
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue
  
$
115,411
    
$
116,170
    
$
117,702
    
$
119,875
    
$
469,158
    
$
122,192
    
$
123,336
  
Expenses
    
92,669
      
98,446
      
100,282
      
102,551
      
393,948
      
107,674
      
104,304
  
Segment Operating Income
  
$
22,742
    
$
17,724
    
$
17,420
    
$
17,324
    
$
75,210
    
$
14,518
    
$
19,032
  
Segment Operating Margin
    
19.7
%
    
15.3
%
    
14.8
%
    
14.5
%
    
16.0
%
    
11.9
%
    
15.4
%
G&A Allocation(4)
  
$
8,251
    
$
7,811
    
$
6,678
    
$
8,203
    
$
30,943
    
$
7,965
    
$
7,998
  
Segment Operating Income (Including G&A Allocation)
  
$
14,491
    
$
9,913
    
$
10,742
    
$
9,121
    
$
44,267
    
$
6,553
    
$
11,034
  
Segment Operating Margin (Including G&A Allocation)
    
12.6
%
    
8.5
%
    
9.1
%
    
7.6
%
    
9.4
%
    
5.4
%
    
8.9
%
                                                         
Brookdale units served:
                                                        
Outpatient Therapy
    
59,660
      
61,385
      
66,581
      
63,938
              
60,949
      
61,509
  
Home Health
    
63,497
      
64,307
      
66,078
      
65,936
              
65,031
      
64,348
  
                                                         
Outpatient Therapy treatment codes
    
636,413
      
667,836
      
612,970
      
588,984
      
2,506,203
      
509,651
      
476,530
  
Home Health average census
    
13,767
      
13,884
      
14,126
      
15,065
      
14,211
      
16,490
      
16,126
  
 
Total Senior Housing and Brookdale Ancillary Services
  
FY 2015
    
FY 2016
  
     
Q1 (1)
    
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue
  
$
1,052,232
    
$
1,043,978
    
$
1,040,082
    
$
1,040,835
    
$
4,177,127
    
$
1,061,148
    
$
1,054,568
  
Expenses
    
696,889
      
694,991
      
699,720
      
697,262
      
2,788,862
      
715,902
      
693,103
  
Operating Income
  
$
355,343
    
$
348,987
    
$
340,362
    
$
343,573
    
$
1,388,265
    
$
345,246
    
$
361,465
  
Operating Margin
    
33.8
%
    
33.4
%
    
32.7
%
    
33.0
%
    
33.2
%
    
32.5
%
    
34.3
%
G&A Allocation(4)
  
$
50,344
    
$
45,210
    
$
43,646
    
$
51,084
    
$
190,284
    
$
52,489
    
$
53,804
  
Operating Income (Including G&A Allocation)
  
$
304,999
    
$
303,777
    
$
296,716
    
$
292,489
    
$
1,197,981
    
$
292,757
    
$
307,661
  
Operating Margin (Including G&A Allocation)
    
29.0
%
    
29.1
%
    
28.5
%
    
28.1
%
    
28.7
%
    
27.6
%
    
29.2
%
 
Management Services
  
FY 2015
    
FY 2016
  
     
Q1 (1)
    
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue (Management Fees)
  
$
15,097
    
$
14,839
    
$
14,694
    
$
15,553
    
$
60,183
    
$
16,780
    
$
18,186
  
Expenses (G&A Allocation)(4)
    
9,755
      
8,878
      
9,978
      
11,506
      
40,117
      
11,256
      
11,200
  
Segment Operating Income (Including G&A Allocation)
  
$
5,342
    
$
5,961
    
$
4,716
    
$
4,047
    
$
20,066
    
$
5,524
    
$
6,986
  
Segment Operating Margin (Including G&A Allocation)
    
35.4
%
    
40.2
%
    
32.1
%
    
26.0
%
    
33.3
%
    
32.9
%
    
38.4
%
                                                         
Number of communities (period end)
    
160
      
160
      
157
      
164
      
164
      
162
      
158
  
Total average units(2)
    
27,185
      
27,026
      
26,590
      
26,464
      
26,834
      
26,613
      
26,435
  
Weighted average occupancy
    
86.5
%
    
85.2
%
    
85.8
%
    
86.6
%
    
86.0
%
    
87.1
%
    
86.8
%
Senior Housing average monthly revenue per unit(3)
  
$
4,277
    
$
4,238
    
$
4,224
    
$
4,246
    
$
4,249
    
$
4,371
    
$
4,350
  
 
Total Senior Housing, Brookdale Ancillary and Management Services
  
FY 2015
    
FY 2016
  
     
Q1 (1)
    
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue
  
$
1,067,329
    
$
1,058,817
    
$
1,054,776
    
$
1,056,388
    
$
4,237,310
    
$
1,077,928
    
$
1,072,754
  
Expenses
    
696,889
      
694,991
      
699,720
      
697,262
      
2,788,862
      
715,902
      
693,103
  
Operating Income
  
$
370,440
    
$
363,826
    
$
355,056
    
$
359,126
    
$
1,448,448
    
$
362,026
    
$
379,651
  
Operating Margin
    
34.7
%
    
34.4
%
    
33.7
%
    
34.0
%
    
34.2
%
    
33.6
%
    
35.4
%
G&A Allocation(4)
  
$
60,099
    
$
54,088
    
$
53,624
    
$
62,590
    
$
230,401
    
$
63,745
    
$
65,004
  
Operating Income (Including G&A Allocation)
  
$
310,341
    
$
309,738
    
$
301,432
    
$
296,536
    
$
1,218,047
    
$
298,281
    
$
314,647
  
Operating Margin (Including G&A Allocation)
    
29.1
%
    
29.3
%
    
28.6
%
    
28.1
%
    
28.7
%
    
27.7
%
    
29.3
%
 
(1) Certain prior period expense amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's consolidated financial position or results of operations.
(2) Total average units operated represents the average number of units operated during the period, excluding equity homes.
(3) Senior Housing average monthly revenue per unit represents the average of total monthly resident fee revenues, excluding amortization of entrance fees and Brookdale Ancillary Services segment revenue, divided by average occupied units.
(4) Excludes non-cash stock-based compensation expense and integration, transaction, transaction-related and strategic project costs.
 
 
Page 3
Brookdale Senior Living Inc.
                
Senior Housing Data by Ownership Type
                
As of June 30, 2016
                
 
Financial Data and Operating Information
                
($ in 000s, except Senior Housing average monthly revenue per unit)
          
 
Owned Properties
  
FY 2015
    
FY 2016
  
     
Q1 (1)
    
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue
  
$
412,555
    
$
411,576
    
$
409,249
    
$
412,678
    
$
1,646,058
    
$
415,775
      $
406,908
  
Expenses
    
276,225
      
274,608
      
274,427
      
277,509
      
1,102,769
      
278,140
      
267,901
  
Operating Income
  
$
136,330
    
$
136,968
    
$
134,822
    
$
135,169
    
$
543,289
    
$
137,635
      $
139,007
  
Operating Margin
    
33.0
%
    
33.3
%
    
32.9
%
    
32.8
%
    
33.0
%
    
33.1
%
    
34.2
%
                                                         
Number of communities (period end)
    
422
      
424
      
424
      
413
              
407
      
407
  
Total average units(2)
    
36,923
      
37,182
      
37,128
      
37,431
              
36,248
      
35,615
  
Weighted average unit occupancy
    
86.5
%
    
85.4
%
    
85.7
%
    
85.9
%
            
85.5
%
    
85.1
%
Senior Housing average monthly revenue per unit(3)
  
$
4,305
    
$
4,319
    
$
4,286
    
$
4,277
            
$
4,470
    
$
4,474
  
                                                         
Leased Properties with Purchase Options
  
FY 2015
    
FY 2016
  
     
Q1 (1)
    
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue
  
$
82,064
    
$
79,516
    
$
79,568
    
$
75,462
    
$
316,610
    
$
77,455
      $
75,301
  
Expenses
    
52,414
      
50,638
      
51,187
      
47,852
      
202,091
      
49,583
      
47,522
  
Operating Income
  
$
29,650
    
$
28,878
    
$
28,381
    
$
27,610
    
$
114,519
    
$
27,872
      $
27,779
  
Operating Margin
    
36.1
%
    
36.3
%
    
35.7
%
    
36.6
%
    
36.2
%
    
36.0
%
    
36.9
%
                                                         
Number of communities (period end)
    
103
      
101
      
101
      
96
              
95
      
94
  
Total average units(2)
    
7,027
      
6,803
      
6,806
      
6,340
              
6,336
      
6,144
  
Weighted average unit occupancy
    
87.8
%
    
86.7
%
    
87.4
%
    
88.2
%
            
87.8
%
    
87.9
%
Senior Housing average monthly revenue per unit(3)
  
$
4,433
    
$
4,492
    
$
4,458
    
$
4,498
            
$
4,641
    
$
4,647
  
                                                         
Leased Properties without Purchase Options
  
FY 2015
    
FY 2016
  
     
Q1 (1)
    
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue
  
$
442,202
    
$
436,716
    
$
433,563
    
$
432,820
    
$
1,745,301
    
$
445,726
      $
449,023
  
Expenses
    
275,581
      
271,299
      
273,824
      
269,350
      
1,090,054
      
280,505
      
273,376
  
Operating Income
  
$
166,621
    
$
165,417
    
$
159,739
    
$
163,470
    
$
655,247
    
$
165,221
      $
175,647
  
Operating Margin
    
37.7
%
    
37.9
%
    
36.8
%
    
37.8
%
    
37.5
%
    
37.1
%
    
39.1
%
                                                         
Number of communities (period end)
    
456
      
452
      
450
      
450
              
457
      
455
  
Total average units(2)
    
38,972
      
38,537
      
38,462
      
38,419
              
38,357
      
38,941
  
Weighted average unit occupancy
    
88.2
%
    
87.4
%
    
87.5
%
    
87.3
%
            
86.4
%
    
86.2
%
Senior Housing average monthly revenue per unit(3)
  
$
4,282
    
$
4,313
    
$
4,289
    
$
4,294
            
$
4,474
    
$
4,450
  
 
Total Senior Housing
  
FY 2015
    
FY 2016
  
     
Q1 (1)
    
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
Revenue
  
$
936,821
    
$
927,808
    
$
922,380
    
$
920,960
    
$
3,707,969
    
$
938,956
      $
931,232
  
Expenses
    
604,220
      
596,545
      
599,438
      
594,711
      
2,394,914
      
608,228
      
588,799
  
Operating Income
  
$
332,601
    
$
331,263
    
$
322,942
    
$
326,249
    
$
1,313,055
    
$
330,728
      $
342,433
  
Operating Margin
    
35.5
%
    
35.7
%
    
35.0
%
    
35.4
%
    
35.4
%
    
35.2
%
    
36.8
%
 
Number of communities (period end)
    
981
      
977
      
975
      
959
              
959
      
956
  
Total average units(2)
    
82,922
      
82,522
      
82,396
      
82,190
              
80,941
      
80,700
  
Weighted average unit occupancy
    
87.4
%
    
86.5
%
    
86.7
%
    
86.8
%
            
86.1
%
    
85.8
%
Senior Housing average monthly revenue per unit(3)
  
$
4,305
    
$
4,331
    
$
4,303
    
$
4,302
            
$
4,485
    
$
4,476
  
 
(1) Certain prior period expense amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's consolidated financial position or results of operations.
(2) Total average units operated represents the average number of units operated during the period, excluding equity homes.
  
(3) Senior Housing average monthly revenue per unit represents the average of total monthly resident fee revenues, excluding amortization of entrance fees and Brookdale Ancillary Services segment revenue, divided by average occupied units.
Page 4
 
Brookdale Senior Living Inc.
            
Same Community and Capital Expenditure Information
            
As of June 30, 2016
            
 
Senior Housing Same Community Information
                        
($ in 000s, except Senior Housing average monthly revenue per unit)
 
  
Three Months Ended June 30,
          
Twelve Months Ended June 30,
        
   
2016
    
2015
    
% Change
    
2016
    
2015
    
% Change
  
Revenue
  
$
896,326
    
$
882,624
      
1.6
%
  
$
3,507,162
    
$
3,490,879
      
0.5
%
Operating Expense
    
562,558
      
561,869
      
0.1
%
    
2,247,442
      
2,240,866
      
0.3
%
Same Community Operating Income
  
$
333,768
    
$
320,755
      
4.1
%
  
$
1,259,720
    
$
1,250,013
      
0.8
%
Same Communitity Operating Margin
    
37.2
%
    
36.3
%
    
0.9
%
    
35.9
%
    
35.8
%
    
0.1
%
                                                 
Number of communities (period end)
    
933
      
933
              
924
      
924
          
Weighted average unit occupancy
    
86.0
%
    
87.2
%
    
-1.2
%
    
86.7
%
    
88.4
%
    
-1.7
%
Senior Housing average monthly revenue per unit (1)
  
$
4,460
    
$
4,331
      
3.0
%
  
$
4,380
    
$
4,271
      
2.6
%
                                                 
Same community information reflects historical results from senior housing operations for same store communities (utilizing the Company's methodology for determining same store communities).
  
 
Schedule of Capital Expenditures
                        
($ in 000s)
                        
 
   
Three Months Ended June 30,
    
Six Months Ended June 30,
  
Type
  
2016
    
2015
    
2016
    
2015
  
Recurring
  
$
15,995
    
$
19,527
    
$
31,278
    
$
36,289
  
Less: reimbursements
    
(2,327
)
    
(2,102
)
    
(4,329
)
    
(3,861
)
    Net Recurring (2)
    
13,668
      
17,425
      
26,949
      
32,428
  
EBITDA-enhancing / Major Projects (3)
    
28,643
      
35,235
      
61,121
      
61,371
  
Corporate, integration and other (4)
    
16,448
      
29,468
      
27,723
      
43,023
  
        Non-Development Capital Expenditures
    
58,759
      
82,128
      
115,793
      
136,822
  
                                 
Development (Program Max, net) (5)
    
6,508
      
1,621
      
10,722
      
10,760
  
        Total Capital Expenditures (6)
    
65,267
      
83,749
      
126,515
      
147,582
  
                                 
Add: Total lessor reimbursements
  
 
14,557
    
 
15,470
    
 
32,326
    
 
30,766
  
Add: Change in related payables
    
1,726
      
-
      
31,219
      
-
  
        Cash paid for additions to PP&E
  
$
81,550
    
$
99,219
    
$
190,060
    
$
178,348
  
 
(1) Senior Housing average monthly revenue per unit represents the average of total monthly resident fee revenues, excluding amortization of entrance fees and Brookdale Ancillary Services segment revenue, divided by average occupied units.
(2)  Payments are included in CFFO.
(3)  Includes EBITDA-enhancing projects (primarily community renovations and apartment upgrades) and other major building infrastructure projects. Amounts shown are amounts invested, net of third party lessor reimbursements of $5.8 million and $6.1 million for the three months ended June 30, 2016 and 2015, respectively, and $12.8 million and $8.9 million for the six months ended June 30, 2016 and 2015, respectively.
(4)  Corporate, integration and other includes capital expenditures for information technology systems and equipment and expenditures supporting the expansion of our support platform and ancillary services programs.
(5)  Includes community expansions and major repositioning or upgrade projects.  Also includes de novo community developments.  Amounts shown are amounts invested, net of third party lessor reimbursements of $6.5 million and $7.2 million for the three months ended June 30, 2016 and 2015, respectively, and $15.2 million and $18.0 million for the six months ended June 30, 2016 and 2015, respectively.
(6)  Amounts shown are gross expenditures (including related payables), net of third party lessor reimbursements. Approximately $18.1 million and $16.5 million of expense was recognized during the three months ended June 30, 2016 and 2015, respectively, and $35.0 mllion and $31.4 million of expense was recognized during the six months ended June 30, 2016 and 2015, respectively, for normal repairs and maintenance and capital spend under $1,500 per invoice, except for unit turnovers.
 
 
Page 5
 
Brookdale Senior Living Inc.
                                  
Capital Structure - selected financial information
                              
As of June 30, 2016
                                    
($ in 000s)
                                      
 
Long Term Debt and Line of Credit Maturities
          
 
   
Maturities
  
   
Mortgage
    
weighted
    
Line of
    
weighted
    
Total
  
   
Debt (1)
    
rate (2)
    
Credit
    
rate (2)
    
Debt
  
                               
2016 (3)
  
$
237,959
      
4.88
%
  
$
-
      
-
    
$
237,959
  
2017
    
216,628
      
5.56
%
    
-
      
-
    
 
216,628
  
2018
    
1,204,522
      
4.47
%
    
-
      
-
    
 
1,204,522
  
2019
    
132,618
      
5.88
%
    
-
      
-
    
 
132,618
  
2020
    
467,520
      
5.09
%
    
186,500
      
3.88
%
  
 
654,020
  
Thereafter
    
1,449,408
      
3.90
%
    
-
      
-
    
 
1,449,408
  
Total
  
$
3,708,655
      
4.47
%
  
$
186,500
      
3.88
%
  
$
3,895,155
  
 
Coverage Ratios
                  
 
   
Six Months Ended June 30, 2016 (4)
  
   
Owned
    
Leased
  
   
Communities
    
Communities*
  
             
Units
    
35,690
      
44,978
  
Operating Income
  
$
276,642
    
$
396,519
  
Operating Income adjusted for 5% management fee and capital expenditures at $350/unit
  
$
229,261
    
$
336,272
  
Interest Payments
  
$
87,721
          
Cash Lease Payments
          
$
307,683
  
                 
Coverage
    
2.6
x
    
1.1
x
 
*  Leased communities include communities subject to capital and financing leases.
 
Debt Amortization
              
 
   
Six Months Ended June 30,
  
   
2016
    
2015
  
Scheduled debt amortization
  
$
42,861
    
$
44,684
  
Lease financing debt amortization - FMV or no purchase option (5)
    
27,926
      
25,195
  
Lease financing debt amortization - bargain purchase option
    
3,101
      
2,585
  
    Total debt amortization
  
$
73,888
    
$
72,464
  
 
Line Availability
                  
 
   
06/30/15
    
09/30/15
    
12/31/15
    
03/31/16
    
06/30/16
  
                               
Total line commitment
  
$
500,000
    
$
500,000
    
$
500,000
    
$
500,000
    
$
500,000
  
                                         
Line of credit (6)
  
$
468,092
    
$
443,378
    
$
416,605
    
$
441,048
    
$
453,744
  
Ending line balance
    
270,000
      
310,000
      
310,000
      
210,000
      
186,500
  
Available to draw
  
$
198,092
    
$
133,378
    
$
106,605
    
$
231,048
    
$
267,244
  
Cash and cash equivalents
    
78,496
      
70,391
      
88,029
      
70,862
      
39,053
  
Total liquidity (available to draw + cash)
  
$
276,588
    
$
203,769
    
$
194,634
    
$
301,910
    
$
306,297
  
                                         
Total letters of credit outstanding
  
$
83,685
    
$
83,940
    
$
82,413
    
$
86,667
    
$
86,441
  
 
Leverage Ratios (7)
            
 
         
Annualized
  
Trailing twelve months ended June 30, 2016
        
Leverage
  
Adjusted EBITDAR
  
$
1,209,955
        
Less: cash operating lease payments
    
(376,685
)
      
Adjusted EBITDA
    
833,270
        
Less: cash capital and financing lease payments
    
(235,103
)
      
Adjusted EBITDA after capital and financing lease payments
    
598,167
        
               
               
Debt as of June 30, 2016
              
Debt (1)
    
3,708,655
        
Line of credit
    
186,500
        
Less: unrestricted cash
    
(39,053
)
      
Less: cash held as collateral against existing debt
    
(2,249
)
      
Total net debt
    
3,853,853
      
6.4
x 
                 
Plus: cash lease payments multiplied by 8
    
4,894,304
          
Total adjusted net debt
  
$
8,748,157
      
7.2
x 
 
Debt Structure
                
 
         
Weighted
  
   
Balance
    
rate (2)
  
Fixed rate debt (1)
  
$
2,457,505
      
5.15
%
Variable rate debt (1)
    
1,251,150
      
3.13
%
Line of credit (cash borrowings)
    
186,500
      
3.88
%
   Total long term debt and line of credit
  
$
3,895,155
          
                 
                 
   
Balance
    
% of total
  
Variable rate debt with interest rate caps (1) (8)
  
$
814,198
      
65.1
%
Variable rate debt - unhedged (1)
    
436,952
      
34.9
%
Total variable rate debt (1)
  
$
1,251,150
      
100.0
%
 
(1) Includes mortgage debt, convertible notes and other notes payable, but excludes capital and financing leases and line of credit.
(2) Pertaining to variable rate debt, reflects a) market rates as of June 30, 2016 and b) applicable cap rates for hedged debt.
(3) Maturities of mortgage debt in 2016 includes the following debt instruments with post-2016 scheduled maturity dates: (i) $154.7 million of debt on Assets Held for Sale and (ii) $29.1 million of demand notes payable to the unconsolidated entrance fee venture, which we utilize in certain states in lieu of cash reserves.
(4) Senior housing operating income and adjusted operating income exclude Brookdale Ancillary Services segment operating income.
(5) Payments are included in CFFO.
                        
(6) The actual amount available to borrow under the line of credit may vary from time to time as it is based on borrowing base calculations related to the value and performance of the communities securing the facility.
(7) Adjusted EBITDAR and Adjusted EBITDA as reported in the calculation of leverage ratios exclude integration, transaction, transaction-related and strategic project costs of $97.5 million (excluding $8.1 million of debt modification costs included in CFFO) for the trailing twelve months ended June 30, 2016.
(8) Weighted cap rate for stated reporting period of 4.63% is materially above current market rates, therefore caps have no impact on consolidated interest expense for given period.
 
 
Page 6
 
Brookdale Senior Living Inc.
Adjusted EBITDA and CFFO Calculations
As of June 30, 2016
  
 
CFFO Reconciliation
  
($ in 000s)
  
FY 2015
    
FY 2016
  
     
Q1
      
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
    
Year to Date
  
                                                             
Net cash provided by operating activities
  
$
10,057
    
$
100,767
    
$
91,361
    
$
90,181
    
$
292,366
    
$
70,343
    
$
107,496
    
$
177,839
  
Net cash used in investing activities
    
(231,291
)
    
(145,206
)
    
(121,805
)
    
(70,675
)
    
(568,977
)
    
(74,448
)
    
(82,288
)
  
 
(156,736
)
Net cash provided by (used in) financing activities
    
232,333
      
7,753
      
22,339
      
(1,868
)
    
260,557
      
(13,062
)
    
(57,017
)
  
 
(70,079
)
Net increase (decrease) in cash and cash equivalents
  
$
11,099
    
$
(36,686
)
  
$
(8,105
)
  
$
17,638
    
$
(16,054
)
  
$
(17,167
)
  
$
(31,809
)
  
$
(48,976
)
                                                                 
                                                                 
Net cash provided by operating activities
  
$
10,057
    
$
100,767
    
$
91,361
    
$
90,181
    
$
292,366
    
$
70,343
    
$
107,496
    
$
177,839
  
Changes in operating assets and liabilities
    
16,425
      
547
      
(6,324
)
    
664
      
11,312
      
28,140
      
10,420
      
38,560
  
Add: Loss on facility lease termination
    
76,143
      
-
      
-
      
-
      
76,143
      
-
      
-
      
-
  
Less: Distributions from unconsolidated ventures from cumulative share of net earnings
    
(500
)
    
(950
)
    
(6,375
)
    
-
      
(7,825
)
    
-
      
-
      
-
  
Less: Recurring capital expenditures, net
    
(15,003
)
    
(17,425
)
    
(14,531
)
    
(13,978
)
    
(60,937
)
    
(13,281
)
    
(13,668
)
    
(26,949
)
Less: Lease financing debt amortization with fair market value or no purchase options
    
(12,439
)
    
(12,756
)
    
(12,852
)
    
(13,249
)
    
(51,296
)
    
(13,809
)
    
(14,117
)
    
(27,926
)
Add: Refundable entrance fees received
    
36
      
550
      
924
      
429
      
1,939
      
535
      
611
      
1,146
  
Less: Entrance fee refunds disbursed
    
(829
)
    
(988
)
    
(1,434
)
    
(1,160
)
    
(4,411
)
    
(1,128
)
    
(617
)
    
(1,745
)
Add: CFFO of unconsolidated ventures
    
14,213
      
11,177
      
15,481
      
18,896
      
59,767
      
15,354
      
15,939
      
31,293
  
CFFO
  
$
88,103
    
$
80,922
    
$
66,250
    
$
81,783
    
$
317,058
    
$
86,154
    
$
106,064
    
$
192,218
  
                                                                 
Add:  Integration, transaction, transaction-related and strategic project costs
    
27,300
      
29,027
      
42,499
      
24,853
      
123,679
      
20,928
      
17,324
      
38,252
  
Adjusted CFFO
  
$
115,403
    
$
109,949
    
$
108,749
    
$
106,636
    
$
440,737
    
$
107,082
    
$
123,388
    
$
230,470
  
 
Adjusted EBITDA and CFFO Calculations
($ in 000s)
  
FY 2015
    
FY 2016
    
Q2 2016 CFFO Distribution
  
     
Q1(1)
   
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
    
Owned
    
Other (2)
    
Transaction/
Integration
  
                                                                         
Resident and management fee revenue
  
$
1,067,329
    
$
1,058,817
    
$
1,054,776
    
$
1,056,388
    
$
4,237,310
    
$
1,077,928
    
$
1,072,754
    
$
406,908
    
$
665,846
    
$
-
  
                                                                                 
Less: Facility operating expenses
    
(696,889
)
    
(694,991
)
    
(699,720
)
    
(697,262
)
    
(2,788,862
)
    
(715,902
)
    
(693,103
)
    
(267,901
)
    
(425,202
)
    
-
  
Add:  Change in future service obligation
    
-
      
-
      
-
      
(941
)
    
(941
)
    
-
      
-
      
-
      
-
      
-
  
Adjusted facility operating expenses
    
(696,889
)
    
(694,991
)
    
(699,720
)
    
(698,203
)
    
(2,789,803
)
    
(715,902
)
    
(693,103
)
    
(267,901
)
    
(425,202
)
    
-
  
                                                                                 
Less: G&A including non-cash stock-based compensation expense
    
(89,530
)
    
(89,545
)
    
(99,534
)
    
(91,970
)
    
(370,579
)
    
(92,621
)
    
(90,695
)
    
(20,015
)
    
(53,983
)
    
(16,697
)
Less: Transaction costs
    
(6,742
)
    
(421
)
    
-
      
(1,089
)
    
(8,252
)
    
(850
)
    
(441
)
    
-
      
-
      
(441
)
Add:  G&A non-cash stock-based compensation expense
    
8,873
      
6,851
      
10,147
      
5,780
      
31,651
      
9,769
      
8,994
      
-
      
8,994
      
-
  
Net G&A (3)
    
(87,399
)
    
(83,115
)
    
(89,387
)
    
(87,279
)
    
(347,180
)
    
(83,702
)
    
(82,142
)
    
(20,015
)
    
(44,989
)
    
(17,138
)
                                                                                 
Less: Facility lease expense
    
(94,471
)
    
(91,338
)
    
(91,144
)
    
(90,621
)
    
(367,574
)
    
(96,689
)
    
(92,682
)
    
-
      
(92,682
)
    
-
  
Add:  Straight-line lease expense
    
2,801
      
1,919
      
1,731
      
505
      
6,956
      
3,935
      
(523
)
    
-
      
(523
)
    
-
  
Add: Amortization of (above) below market lease, net
    
(1,959
)
    
(1,840
)
    
(1,626
)
    
(1,733
)
    
(7,158
)
    
(1,733
)
    
(1,733
)
    
-
      
(1,733
)
    
-
  
Less: Amortization of deferred gain
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(4,372
)
    
(1,093
)
    
(1,093
)
    
-
      
(1,093
)
    
-
  
Net lease expense
    
(94,722
)
    
(92,352
)
    
(92,132
)
    
(92,942
)
    
(372,148
)
    
(95,580
)
    
(96,031
)
    
-
      
(96,031
)
    
-
  
                                                                                 
Adjusted EBITDA
    
188,319
      
188,359
      
173,537
      
177,964
      
728,179
      
182,744
      
201,478
      
118,992
      
99,624
      
(17,138
)
                                                                                 
Less: Entrance fee amortization
    
(767
)
    
(930
)
    
(619
)
    
(888
)
    
(3,204
)
    
(926
)
    
(1,013
)
    
-
      
(1,013
)
    
-
  
                                                                                 
Add:  Entrance fee receipts
    
2,491
      
3,408
      
4,498
      
2,655
      
13,052
      
3,622
      
4,982
      
-
      
4,982
      
-
  
Less: Entrance fee disbursements
    
(829
)
    
(988
)
    
(1,434
)
    
(1,160
)
    
(4,411
)
    
(1,128
)
    
(617
)
    
-
      
(617
)
    
-
  
Net entrance fees
    
1,662
      
2,420
      
3,064
      
1,495
      
8,641
      
2,494
      
4,365
      
-
      
4,365
      
-
  
                                                                                 
Add:  CFFO of unconsolidated ventures
    
14,213
      
11,177
      
15,481
      
18,896
      
59,767
      
15,354
      
15,939
      
-
      
15,939
      
-
  
                                                                                 
Less: Recurring capital expenditures, net
    
(15,003
)
    
(17,425
)
    
(14,531
)
    
(13,978
)
    
(60,937
)
    
(13,281
)
    
(13,668
)
    
(5,827
)
    
(7,841
)
    
-
  
Less: Interest expense, net
    
(89,424
)
    
(90,530
)
    
(90,847
)
    
(88,738
)
    
(359,539
)
    
(87,428
)
    
(87,008
)
    
(43,731
)
    
(43,277
)
    
-
  
Less: Lease financing debt amortization with fair market value or no purchase options
    
(12,439
)
    
(12,756
)
    
(12,852
)
    
(13,249
)
    
(51,296
)
    
(13,809
)
    
(14,117
)
    
-
      
(14,117
)
    
-
  
Less: Other
    
1,542
      
607
      
(6,983
)
    
281
      
(4,553
)
    
1,006
      
88
      
-
      
274
      
(186
)
                                                                                 
CFFO
  
$
88,103
    
$
80,922
    
$
66,250
    
$
81,783
    
$
317,058
    
$
86,154
    
$
106,064
    
$
69,434
    
$
53,954
    
$
(17,324
)
                                                                                 
Add:  Integration, transaction, transaction-related and strategic project costs
    
27,300
      
29,027
      
42,499
      
24,853
      
123,679
      
20,928
      
17,324
      
-
      
-
      
17,324
  
Adjusted CFFO
  
$
115,403
    
$
109,949
    
$
108,749
    
$
106,636
    
$
440,737
    
$
107,082
    
$
123,388
    
$
69,434
    
$
53,954
    
$
-
  
 
(1) Certain prior period expense amounts have been reclassified to conform to the current financial statement presentation, with no effect on the Company's consolidated financial position or results of operations.
(2) Other includes financial data from leased communities, Brookdale Ancillary Services, and Management Services.
(3) Allocation of G&A to Owned and Other is based upon a percentage of revenue and excludes non-cash stock-based compensation expense and integration, transaction, transaction-related and strategic project costs.
 
 
Page 7
 
Brookdale Senior Living Inc.
CFFO of Unconsolidated Ventures
As of June 30, 2016
 
CFFO of Unconsolidated Ventures Reconciliation
($ in 000s except Senior Housing average monthly revenue per unit)
 
  
CCRC Venture
    
Other Ventures
  
   
FY 2015
    
FY 2016
    
FY 2015
    
FY 2016
  
     
Q1
      
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
      
Q1
      
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
  
                                                                                                             
Number of communities (period end)
    
14
      
14
      
14
      
15
            
15
      
15
      
86
      
122
      
122
      
125
            
125
      
124
  
Total average units
    
6,843
      
6,848
      
6,919
      
7,068
            
7,187
      
7,175
      
11,949
      
12,082
      
17,219
      
17,283
            
17,481
      
17,410
  
Weighted average unit occupancy
    
85.3
%
    
84.4
%
    
84.0
%
    
84.8
%
          
86.1
%
    
85.4
%
    
86.6
%
    
86.0
%
    
87.5
%
    
88.1
%
          
88.2
%
    
87.7
%
Senior Housing average monthly revenue per unit
  
$
4,929
    
$
4,829
    
$
4,887
    
$
4,901
          
$
4,966
    
$
4,954
    
$
4,110
    
$
4,119
    
$
3,930
    
$
3,947
          
$
4,092
    
$
4,069
  
                                                                                                             
Resident fee revenue
  
$
87,473
    
$
85,179
    
$
87,059
    
$
89,830
    
$
349,541
    
$
95,639
    
$
95,112
    
$
127,513
    
$
126,435
    
$
177,678
    
$
180,362
    
$
611,988
    
$
189,291
    
$
186,429
  
                                                                                                                 
Less: Facility operating expenses
    
(67,451
)
    
(68,544
)
    
(70,756
)
    
(70,788
)
    
(277,539
)
    
(73,580
)
    
(73,312
)
    
(83,469
)
    
(83,094
)
    
(117,433
)
    
(116,343
)
    
(400,339
)
    
(120,111
)
    
(120,609
)
                                                                                                                 
Less: General and administrative expenses including management fees
    
(4,707
)
    
(4,691
)
    
(4,765
)
    
(5,345
)
    
(19,508
)
    
(5,241
)
    
(5,394
)
    
(6,153
)
    
(6,080
)
    
(8,625
)
    
(9,344
)
    
(30,202
)
    
(10,147
)
    
(9,487
)
                                                                                                                 
Adjusted EBITDA
    
15,315
      
11,944
      
11,538
      
13,697
      
52,494
      
16,818
      
16,406
      
37,891
      
37,261
      
51,620
      
54,675
      
181,447
      
59,033
      
56,333
  
                                                                                                                 
Less: Entrance fee amortization
    
(1,141
)
    
(1,482
)
    
(1,828
)
    
(1,718
)
    
(6,169
)
    
(3,395
)
    
(4,103
)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
  
                                                                                                                 
Add:  Entrance fee receipts
    
23,251
      
26,040
      
27,744
      
35,017
      
112,052
      
25,882
      
32,574
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Less: Entrance fee disbursements
    
(9,181
)
    
(13,042
)
    
(10,875
)
    
(9,565
)
    
(42,663
)
    
(10,776
)
    
(13,906
)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Net entrance fees
    
14,070
      
12,998
      
16,869
      
25,452
      
69,389
      
15,106
      
18,668
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
                                                                                                                 
Less: Recurring capital expenditures, net
    
(1,159
)
    
(1,898
)
    
(1,860
)
    
(2,201
)
    
(7,118
)
    
(1,522
)
    
(1,694
)
    
(2,336
)
    
(2,760
)
    
(3,577
)
    
(4,052
)
    
(12,725
)
    
(2,794
)
    
(3,495
)
Less: Interest expense, net
    
(1,530
)
    
(1,500
)
    
(1,528
)
    
(1,462
)
    
(6,020
)
    
(1,433
)
    
(1,335
)
    
(25,845
)
    
(26,198
)
    
(34,371
)
    
(35,300
)
    
(121,714
)
    
(35,206
)
    
(34,838
)
Less: Other
    
-
      
-
      
-
      
(8
)
    
(8
)
    
10
      
(43
)
    
(613
)
    
(103
)
    
(300
)
    
(616
)
    
(1,632
)
    
(759
)
    
(1,128
)
                                                                                                                 
CFFO
  
$
25,555
    
$
20,062
    
$
23,191
    
$
33,760
    
$
102,568
    
$
25,584
    
$
27,899
    
$
9,097
    
$
8,201
    
$
13,372
    
$
14,707
    
$
45,377
    
$
20,274
    
$
16,872
  
                                                                                                                 
Add: Integration, transaction, transaction-related and strategic project costs (1)
    
-
      
-
      
4,683
      
-
      
4,683
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Adjusted CFFO
  
$
25,555
    
$
20,062
    
$
27,874
    
$
33,760
    
$
107,251
    
$
25,584
    
$
27,899
    
$
9,097
    
$
8,201
    
$
13,372
    
$
14,707
    
$
45,377
    
$
20,274
    
$
16,872
  
                                                                                                                 
                                                                                                                 
Brookdale Weighted Average Ownership %
    
51.0
%
    
51.0
%
    
51.0
%
    
51.0
%
    
51.0
%
    
51.0
%
    
51.0
%
    
13.0
%
    
11.5
%
    
9.5
%
    
11.4
%
    
11.2
%
    
11.4
%
    
10.1
%
CFFO of Unconsolidated Ventures
  
$
13,033
    
$
10,232
    
$
14,216
    
$
17,218
    
$
54,698
    
$
13,048
    
$
14,228
    
$
1,180
    
$
945
    
$
1,265
    
$
1,678
    
$
5,069
    
$
2,306
    
$
1,711
  
                                                                                                                 
                                                                                                                 
Leverage Ratio for Unconsolidated Ventures
                                                                                                                
Debt Principal as of June 30, 2016
                                                  
$
209,569
                                                    
$
1,965,451
  
Annualized Adjusted EBITDA
                                                    
66,448
                                                      
230,732
  
Leverage
                                                    
3.2
x
                                                    
8.5
x
                                                                                                                 
                                                                                                                 
                                                                                                                 
Unconsolidated Ventures Schedule of Capital Expenditures
                                                                                                  
($ in 000s)
  
FY 2015
    
FY 2016
                                                          
Type
    
Q1
      
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
      
Q2
                                                          
Recurring
  
$
3,495
    
$
4,658
    
$
5,437
    
$
6,253
    
$
19,843
    
$
4,316
    
$
5,189
                                                          
EBITDA-enhancing / Major Projects
    
13,243
      
24,562
      
27,167
      
37,079
    
$
102,051
      
17,490
      
19,319
                                                          
Development (Program Max)
    
4,340
      
7,685
      
6,178
      
8,332
    
$
26,535
      
5,756
      
5,256
                                                          
Total Capital Expenditures
  
$
21,078
    
$
36,905
    
$
38,782
    
$
51,664
    
$
148,429
    
$
27,562
    
$
29,764
                                                          
 
(1) Integration, transaction, transaction-related and strategic project costs include third party expenses directly related to integration activities, as well as internal costs such as labor reflecting time spent by Company personnel on integration and strategic project activity.  Transaction costs include third party costs directly related to the formation of the unconsolidated ventures and other acquisition activity.
 
 
Page 8
 
Brookdale Senior Living Inc.
Cash Lease and Interest Expense
As of June 30, 2016
  
 
Lease Maturity Information
    
 
   
Leased Properties with Purchase
Options
    
Leased Properties without
Purchase Options
    
Total Leased Communities
  
   
Community
    
Unit
    
Community
    
Unit
    
Community
    
Unit
  
Initial Lease Maturities
  
Count
    
Capacity
    
Count
    
Capacity
    
Count
    
Capacity
  
2016
    
-
      
-
      
6
      
479
      
6
      
479
  
2017
    
31
      
2,050
      
7
      
819
      
38
      
2,869
  
2018
    
42
      
2,170
      
11
      
1,503
      
53
      
3,673
  
2019
    
3
      
327
      
50
      
2,753
      
53
      
3,080
  
2020
    
2
      
301
      
90
      
4,686
      
92
      
4,987
  
Thereafter
    
16
      
1,296
      
291
      
28,594
      
307
      
29,890
  
Total
    
94
      
6,144
      
455
      
38,834
      
549
      
44,978
  
 
 
Cash Lease and Interest Expense
  
 
($ in 000s)
  
FY 2015
    
FY 2016
  
     
Q1
      
Q2
      
Q3
      
Q4
      
Q1
      
Q2
  
Facility Lease Payments
                                                
                                                 
Facility lease expense
  
$
94,471
    
$
91,338
    
$
91,144
    
$
90,621
    
$
96,689
    
$
92,682
  
Less:  Straight-line lease expense, net
    
(842
)
    
(79
)
    
(105
)
    
1,228
      
(2,202
)
    
2,256
  
Add: Amortization of deferred gain
    
1,093
      
1,093
      
1,093
      
1,093
      
1,093
      
1,093
  
Cash lease payments - Operating Leases
  
$
94,722
    
$
92,352
    
$
92,132
    
$
92,942
    
$
95,580
    
$
96,031
  
Supplemental breakout:
                                                
Communities with purchase options
  
$
6,343
    
$
6,311
    
$
5,734
    
$
5,968
    
$
5,779
    
$
5,784
  
Communities without purchase options
    
88,379
      
86,041
      
86,398
      
86,974
      
89,801
      
90,247
  
     
$
94,722
    
$
92,352
    
$
92,132
    
$
92,942
    
$
95,580
    
$
96,031
  
                                                 
Interest Expense: Capital and financing lease obligations
  
$
53,203
    
$
53,043
    
$
53,217
    
$
51,669
    
$
50,579
    
$
50,581
  
Less: Capital and financing lease interest - noncash
    
(5,700
)
    
(5,816
)
    
(5,942
)
    
(6,014
)
    
(6,439
)
    
(6,575
)
Add: Capital and financing lease principal (1)
    
12,439
      
12,756
      
12,852
      
13,249
      
13,809
      
14,117
  
Cash lease payments - Capital and Financing Leases
  
$
59,942
    
$
59,983
    
$
60,127
    
$
58,904
    
$
57,949
    
$
58,123
  
Supplemental breakout:
                                                
Communities with purchase options
  
$
14,205
    
$
13,558
    
$
13,975
    
$
12,233
    
$
12,563
    
$
12,430
  
Communities without purchase options
    
45,737
      
46,425
      
46,152
      
46,671
      
45,386
      
45,693
  
     
$
59,942
    
$
59,983
    
$
60,127
    
$
58,904
    
$
57,949
    
$
58,123
  
                                                 
Total cash lease payments
  
$
154,664
    
$
152,335
    
$
152,259
    
$
151,846
    
$
153,529
    
$
154,154
  
                                                 
Interest Expense
                                                
                                                 
Property level debt interest expense
  
$
40,174
    
$
41,510
    
$
41,798
    
$
41,306
    
$
41,816
    
$
41,557
  
Convertible debt interest expense
    
2,174
      
2,174
      
2,174
      
2,174
      
2,174
      
2,174
  
Total debt interest expense
    
42,348
      
43,684
      
43,972
      
43,480
      
43,990
      
43,731
  
Less: interest income
    
(427
)
    
(382
)
    
(398
)
    
(396
)
    
(702
)
    
(728
)
Interest expense, net
  
$
41,921
    
$
43,302
    
$
43,574
    
$
43,084
    
$
43,288
    
$
43,003
  
                                                 
(1) Includes lease financing debt amortization on communities with FMV or no purchase option. Payments are included in CFFO.
  
 
 
Page 9
 
Brookdale Senior Living Inc.
Quarterly Cash Flow Statements
As of June 30, 2016
($ in 000s)
 
Cash Flow Statements
    
 
     
Q1 2015
      
Q2 2015
      
Q3 2015
      
Q4 2015
    
FY 2015
      
Q1 2016
      
Q2 2016
  
Cash Flows from Operating Activities
                                                      
Net income (loss)
  
$
(130,709
)
  
$
(84,807
)
  
$
(68,336
)
  
$
(174,303
)
  
$
(458,155
)
  
$
(48,817
)
  
$
(35,491
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
                                          
Loss on extinguishment of debt, net
    
44
      
-
      
-
      
77
      
121
      
139
      
-
  
Depreciation and amortization, net
    
220,808
      
225,483
      
161,331
      
128,894
      
736,516
      
129,447
      
135,682
  
Asset impairment
    
-
      
-
      
-
      
57,941
      
57,941
      
3,375
      
4,152
  
Equity in (earnings) loss of unconsolidated ventures
    
(1,484
)
    
672
      
1,578
      
38
      
804
      
(1,018
)
    
(338
)
Distributions from unconsolidated ventures from cumulative share of net earnings
    
500
      
950
      
6,375
      
-
      
7,825
      
-
      
-
  
Amortization of deferred gain
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(4,372
)
    
(1,093
)
    
(1,093
)
Amortization of entrance fee revenue
    
(767
)
    
(930
)
    
(619
)
    
(888
)
    
(3,204
)
    
(926
)
    
(1,013
)
Proceeds from deferred entrance fee revenue
    
2,455
      
2,858
      
3,574
      
2,226
      
11,113
      
3,087
      
4,371
  
Deferred income tax (benefit) provision
    
(79,237
)
    
(53,225
)
    
(31,552
)
    
68,753
      
(95,261
)
    
934
      
(602
)
Change in deferred lease liability
    
2,801
      
1,919
      
1,731
      
505
      
6,956
      
3,935
      
(523
)
Change in fair value of derivatives
    
550
      
76
      
164
      
7
      
797
      
24
      
4
  
(Gain) loss on sale of assets
    
-
      
-
      
(1,723
)
    
453
      
(1,270
)
    
(2,749
)
    
198
  
Change in future service obligation
    
-
      
-
      
-
      
(941
)
    
(941
)
    
-
      
-
  
Non-cash stock-based compensation
    
8,873
      
6,851
      
10,147
      
5,780
      
31,651
      
9,769
      
8,994
  
Non-cash interest expense on financing lease obligations
    
5,700
      
5,816
      
5,942
      
6,014
      
23,472
      
6,439
      
6,575
  
Amortization of (above) below market rents, net
    
(1,959
)
    
(1,840
)
    
(1,626
)
    
(1,733
)
    
(7,158
)
    
(1,733
)
    
(1,733
)
Other
    
-
      
(1,416
)
    
(856
)
    
(885
)
    
(3,157
)
    
(2,330
)
    
(1,267
)
Changes in operating assets and liabilities:
                                                        
Accounts receivable, net
    
(13,140
)
    
899
      
9,334
      
8,515
      
5,608
      
(2,738
)
    
8,177
  
Prepaid expenses and other assets, net
    
24,504
      
12,989
      
2,404
      
11,182
      
51,079
      
(36,554
)
    
19,709
  
Accounts payable and accrued expenses
    
(38,773
)
    
(10,763
)
    
26,344
      
(37,372
)
    
(60,564
)
    
(1,388
)
    
(21,745
)
Tenant refundable fees and security deposits
    
(510
)
    
(7
)
    
(221
)
    
214
      
(524
)
    
(226
)
    
264
  
Deferred revenue
    
11,494
      
(3,665
)
    
(31,537
)
    
16,797
      
(6,911
)
    
12,766
      
(16,825
)
Net cash provided by operating activities
    
10,057
      
100,767
      
91,361
      
90,181
      
292,366
      
70,343
      
107,496
  
Cash Flows from Investing Activities
                                                        
Decrease (increase) in lease security deposits and lease acquisition deposits, net
    
13,037
      
2,686
      
(3,182
)
    
(1,675
)
    
10,866
      
(1,210
)
    
(328
)
Decrease (increase) in cash and escrow deposits — restricted
    
12,289
      
(2,083
)
    
(3,384
)
    
22,464
      
29,286
      
72
      
283
  
Additions to property, plant and equipment and leasehold intangibles, net
    
(79,129
)
    
(99,219
)
    
(123,430
)
    
(109,273
)
    
(411,051
)
    
(108,510
)
    
(81,550
)
Acquisition of assets, net of related payables
    
(174,305
)
    
(18,396
)
    
(750
)
    
2,235
      
(191,216
)
    
(12,157
)
    
-
  
Investment in unconsolidated ventures
    
(3,923
)
    
(34,686
)
    
(2,100
)
    
(28,588
)
    
(69,297
)
    
(2,365
)
    
(1,368
)
Distributions received from unconsolidated ventures
    
-
      
-
      
7,038
      
2,016
      
9,054
      
1,724
      
1,878
  
Proceeds from sale of assets, net
    
-
      
4,993
      
3,079
      
41,154
      
49,226
      
45,584
      
-
  
Other
    
740
      
1,499
      
924
      
992
      
4,155
      
2,414
      
(1,203
)
Net cash used in investing activities
    
(231,291
)
    
(145,206
)
    
(121,805
)
    
(70,675
)
    
(568,977
)
    
(74,448
)
    
(82,288
)
Cash Flows from Financing Activities
                                                        
Proceeds from debt
    
85,365
      
79,828
      
384,938
      
35,519
      
585,650
      
177,370
      
14,758
  
Repayment of debt and capital and financing lease obligations
    
(47,555
)
    
(36,482
)
    
(369,352
)
    
(32,373
)
    
(485,762
)
    
(84,016
)
    
(44,411
)
Proceeds from line of credit
    
445,000
      
240,000
      
285,000
      
205,000
      
1,175,000
      
448,500
      
446,000
  
Repayment of line of credit
    
(245,000
)
    
(270,000
)
    
(245,000
)
    
(205,000
)
    
(965,000
)
    
(548,500
)
    
(469,500
)
Payment of financing costs, net of related payables
    
(1,481
)
    
(1,985
)
    
(28,785
)
    
(371
)
    
(32,622
)
    
(818
)
    
177
  
Refundable entrance fees:
                                                        
   Proceeds from refundable entrance fees
    
36
      
550
      
924
      
429
      
1,939
      
535
      
611
  
   Refunds of entrance fees
    
(829
)
    
(988
)
    
(1,434
)
    
(1,160
)
    
(4,411
)
    
(1,128
)
    
(617
)
Cash portion of loss on extinguishment of debt, net
    
(44
)
    
-
      
-
      
-
      
(44
)
    
-
      
-
  
Payment on lease termination
    
(3,875
)
    
(3,875
)
    
(4,625
)
    
(4,625
)
    
(17,000
)
    
(4,625
)
    
(4,625
)
Other
    
716
      
705
      
673
      
713
      
2,807
      
(380
)
    
590
  
   Net cash provided by (used in) financing activities
    
232,333
      
7,753
      
22,339
      
(1,868
)
    
260,557
      
(13,062
)
    
(57,017
)
            Net increase (decrease) in cash and cash equivalents
    
11,099
      
(36,686
)
    
(8,105
)
    
17,638
      
(16,054
)
    
(17,167
)
    
(31,809
)
            Cash and cash equivalents at beginning of period
    
104,083
      
115,182
      
78,496
      
70,391
      
104,083
      
88,029
      
70,862
  
            Cash and cash equivalents at end of period
  
$
115,182
    
$
78,496
    
$
70,391
    
$
88,029
    
$
88,029
    
$
70,862
    
$
39,053
  
 
 
Page 10
 
Brookdale Senior Living Inc.
Adjusted EBITDA Bridge
As of June 30, 2016
 
Reconciliation of Previously Reported Adjusted EBITDA to New Definition
As noted in the earnings release dated August 8, 2016, the Company's definition and calculations of Adjusted EBITDA have changed from prior periods.  Prior period amounts of Adjusted EBITDA included in this supplemental presentation have been recast to conform to the new definition. The new definition of Adjusted EBITDA reflects the removal of the following adjustments to net income (loss) used in the previous definition:  the addition of CFFO from unconsolidated ventures and entrance fee receipts, net of refunds and the subtraction of amortization of entrance fee revenue. Set forth below are reconciliations of the amounts of Adjusted EBITDA previously reported for the full year 2015 and each of the quarters therein and the first quarter of 2016 using the previous definition to the amounts of Adjusted EBITDA calculated using the new definition.
($ in 000s)
  
FY 2015
    
FY 2016
  
     
Q1
      
Q2
      
Q3
      
Q4
    
Full Year
      
Q1
  
Net income (loss)
  
$
(130,709
)
  
$
(84,807
)
  
$
(68,336
)
  
$
(174,303
)
  
$
(458,155
)
  
$
(48,817
)
(Benefit) provision for income taxes
    
(78,288
)
    
(52,593
)
    
(30,796
)
    
69,468
      
(92,209
)
    
1,665
  
Equity in (earnings) loss of unconsolidated ventures
    
(1,484
)
    
672
      
1,578
      
38
      
804
      
(1,018
)
Debt modification and extinguishment costs
    
44
      
-
      
6,736
      
240
      
7,020
      
1,110
  
Other non-operating income
    
(2,491
)
    
(2,654
)
    
(3,089
)
    
(1,593
)
    
(9,827
)
    
(7,787
)
Interest expense
    
96,482
      
96,641
      
97,969
      
97,672
      
388,764
      
96,903
  
Interest income
    
(427
)
    
(382
)
    
(399
)
    
(395
)
    
(1,603
)
    
(702
)
Income (loss) from operations
    
(116,873
)
    
(43,123
)
    
3,663
      
(8,873
)
    
(165,206
)
    
41,354
  
Depreciation and amortization
    
220,427
      
225,645
      
160,715
      
126,378
      
733,165
      
127,137
  
Asset impairment
    
-
      
-
      
-
      
57,941
      
57,941
      
3,375
  
Loss on facility lease termination
    
76,143
      
-
      
-
      
-
      
76,143
      
-
  
Straight-line lease (income) expense
    
2,801
      
1,919
      
1,731
      
505
      
6,956
      
3,935
  
Amortization of (above) below market lease, net
    
(1,959
)
    
(1,840
)
    
(1,626
)
    
(1,733
)
    
(7,158
)
    
(1,733
)
Amortization of deferred gain
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(1,093
)
    
(4,372
)
    
(1,093
)
Amortization of entrance fee revenue
    
(767
)
    
(930
)
    
(619
)
    
(888
)
    
(3,204
)
    
(926
)
Change in future service obligation
    
-
      
-
      
-
      
(941
)
    
(941
)
    
-
  
Non-cash stock-based compensation expense
    
8,873
      
6,851
      
10,147
      
5,780
      
31,651
      
9,769
  
Entrance fee receipts
    
2,491
      
3,408
      
4,498
      
2,655
      
13,052
      
3,622
  
Entrance fee disbursements
    
(829
)
    
(988
)
    
(1,434
)
    
(1,160
)
    
(4,411
)
    
(1,128
)
CFFO from unconsolidated ventures
    
14,213
      
11,177
      
15,481
      
18,896
      
59,767
      
15,354
  
Adjusted EBITDA, as previously reported
    
203,427
      
201,026
      
191,463
      
197,467
      
793,383
      
199,666
  
                                                 
Less:  CFFO from unconsolidated ventures
    
(14,213
)
    
(11,177
)
    
(15,481
)
    
(18,896
)
    
(59,767
)
    
(15,354
)
                                                 
Add: Amortization of entrance fee revenue
    
767
      
930
      
619
      
888
      
3,204
      
926
  
                                                 
Less:  Entrance fee receipts
    
(2,491
)
    
(3,408
)
    
(4,498
)
    
(2,655
)
    
(13,052
)
    
(3,622
)
Add: Entrance fee disbursements
    
829
      
988
      
1,434
      
1,160
      
4,411
      
1,128
  
    Net entrance fees
    
(1,662
)
    
(2,420
)
    
(3,064
)
    
(1,495
)
    
(8,641
)
    
(2,494
)
                                                 
Adjusted EBITDA
  
$
188,319
    
$
188,359
    
$
173,537
    
$
177,964
    
$
728,179
    
$
182,744
  
 
 
 
Page 11